AUDNZD has been trending lower recently but a reversal could be underway since a double bottom pattern has formed. Price failed in its last two attempts to break below 1.0300 and is making its way towards the neckline around 1.0750.
A break above this resistance area could take price up by around 450 pips, which is roughly the same height as the chart formation. If the resistance holds, price could head back towards support at 1.0300 or at least until the area of interest at 1.0500.
The 100 SMA is still below the longer-term 200 SMA on this time frame to show that the path of least resistance is to the downside. In addition, the gap between the moving averages is widening, which reflects stronger bearish momentum.
RSI is on its way down, also indicating that sellers are in control of price action for now. Stochastic is pointing south but seems to be making an upward crossover to suggest a potential return in buying pressure.
RBNZ rate cut expectations could keep the Kiwi from advancing as traders are positioning ahead of the next monetary policy meeting in November 10. The RBA has shown a neutral stance in their latest policy statement, although data has been mostly tilted to the downside, particularly when it comes to employment.
Australia is set to print its quarterly CPI tomorrow and might show a 0.5% gain in price levels, slightly better than the earlier 0.4% uptick and probably enough to confirm that the central bank won’t need to ease anytime soon. If so, AUDNZD could get a strong boost past the neckline and carry on with its climb. On the other hand, downbeat results could allow 1.0750 to hold as a ceiling and push AUDNZD back to the bottom of its range.
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